Remember kids, epic roleplaying and consequences are all about either doing the quest how it was intended or not doing it at all!
Failure ALWAYS have to mean that the quest just stops and gets forgotten, right? When a shopkeeper dies, their empty store should stay empty forever, never mentioned by anybody.
IMMERSION!
There is already done mechanism for preventing death of quest givers marking them as essential during certain quest stages,
such overprotection looks too much as handholding for me, besides thats looks really strange if there was witness of your criminal actions the cant just give same quest for you again, actually I'd like to see "search for killer of my brother" quest given instead of "Oh my Brother dead, but I found this bloodied and pierced list of ingredients for baking muffins, go search for them NOW because thats was his last will and testament" especially thats looks awesome if we kill thous baker loot his body and house and then sleep in his bed and in morning his brother give us such quest without of any suspicions.